NEW YORK (CNN/Money) - Stocks surged Friday, with buyers raring to rally after a two-session selloff. The Nasdaq and the S&P 500 carved out a fourth week of gains, while the Dow saw its second up week.

"I'm encouraged. You get a strong rally for a few days, a couple of days of selling so people can take some profits, then new buyers come in at the lower level," said Donald Selkin, director of research at Joseph Stevens. "That's the classic definition of an uptrend."

Next week brings a wide variety of economic reports and tech and retail earnings. Selkin sees Thursday's Philadelphia Fed index during the day and earnings news from Dell Computer after the close as the most significant of the week.

The Philly Fed index, a regional survey of manufacturing, is forecast to have improved to -6.0 in May from -8.8 in April, according to a survey of analysts by Briefing.com. The index will represent the first reading on manufacturing in the period fully after the winding down of the Iraq war and will therefore be significant, particularly after a weak reading on manufacturing from the ISM recently.

April retail sales, due Wednesday, will also be closely watched, but could be less influential as retailers this week have already reported mostly weak sales. Other economic data include: housing starts and building permits, business inventories, as well as consumer prices and producer prices.

Dell Computer reports its fiscal first-quarter earnings Thursday. The company is forecast to have earned 23 cents, up from 17 cents a year earlier, according to First Call.

Other earnings expected in the week include: Applied Materials, Schering Plough, Wal-Mart Stores and a huge group of other retailers.

All three market indexes closed with strong gains Friday. The Nasdaq composite (up 30.46 to 1520.15, Charts) gained about 2.0 percent, while the Dow Jones industrial average (up 113.38 to 8604.60, Charts) rose 1.3 percent and the S&P 500 index (up 13.14 to 933.41, Charts) gained about 1.4 percent.

For the week, the Nasdaq added 1.2 percent, the Dow added 0.25 percent and the S&P 500 added 0.36 percent. While the advance was minimal overall, the pattern for the week was solid.

On Tuesday, the Nasdaq hit a new 11-month high, while the S&P hit a new 2003 high. Wednesday and Thursday brought in some expected selling. But the climb resumed Friday, with investors using a couple of seemingly optimistic statements from the tech sector as a good excuse to revive the bullish mood.

Stocks have been surging for weeks on hopes that the end of the war in Iraq will usher in a new period of growth in the United States. Despite lack of evidence of such a pick-up in the weeks since the fighting ended, investors have brought the major market indicators to their highest levels in months.

Shares of graphics chip maker nVidia (NVDA: up $5.31 to $21.37, Research, Estimates) surged 33 percent and topped the Nasdaq's most-active list after it said it could see its revenue grow 12 to 18 percent in the second quarter. The company also reported a first-quarter profit that was smaller than a year earlier, but better than expected, and set out to unveil its new chip next week.

"nVidia sparked it, that gave the semiconductors a buzz, and it's spilled over to other techs and that's lifting the Nasdaq," said Joseph Battipaglia, chief stock strategist at Ryan, Beck & Co. "The dollar is holding on today after falling, so that helps. You're also seeing people willing to come back in after the last two sessions of orderly profit taking."

The leader among chipmakers, Intel (INTC: up $0.71 to $19.58, Research, Estimates), saw its stock advance 3.7 percent after the company's president was quoted in a German business newspaper as saying he saw strong demand in the huge Chinese market and expected a semiconductor recovery in the second half of the year. Intel is one of the Nasdaq's most-heavily weighted issues and is also a component of the Dow, where it was the biggest advancer on a percentage basis.

The chip gains arrived on the back of a 5 percent decline for the sector over the last two sessions. The Philadelphia Semiconductor (up 12.93 to 350.70, Charts) index gained 3.8 percent.

Also lifting tech shares, personal computer maker Gateway (GTW: up $0.25 to $3.24, Research, Estimates) said that it is on track to return to profitability this year and that it will be able to meet analysts' current-quarter forecasts. The stock gained around 8.3 percent.

The buoyant mood gave a lift to other influential and heavily weighted tech issues, including networking issues Sun Microsystems (SUNW: up $0.13 to $3.87, Research, Estimates) and Cisco Systems (CSCO: up $0.73 to $15.95, Research, Estimates). Sun rose 3.4 percent on the session, while Cisco added 4.8 percent. The Amex Networking (up 3.24 to 177.76, Charts) index gained 3.2 percent.

"We're getting to the period seasonally that isn't usually the best time for the markets," Ryan, Beck's Battipaglia added. "What can help sustain a rally during this time will be progress on the economy, with the labor market showing recovery, some tax stimulus, which we're likely to see, and the durability of the earnings forecasts we've gotten for the next few quarters."

Market breadth was strongly positive. Almost three stocks rose for every one that fell on the New York Stock Exchange, on volume of 1.29 billion shares. On the Nasdaq, the advance/decline ratio stood at two to one as 1.53 billion shares changed hands.

Bonds retreated a little amid the stock market's rediscovered strength. The yield on the 10-year Treasury note climbed back up to 3.68 percent. The dollar managed to hold tight versus other major currencies after its recent slide, trading little changed versus the euro and up slightly versus the yen.

Among major commodities markets, light sweet crude oil futures rose 66 cents to $27.72, while gold added 20 cents to $348.90

Stocks in Europe closed mixed, as did Asian markets overnight.